The recent resurgence in Middle East tensions has thrust inflation back into the spotlight, reinforcing the possibility that the European Central Bank may need to tighten policy further after its quarter-point rate increase in June.

Economists overwhelmingly expect the ECB's Governing Council to leave interest rates unchanged, maintaining the deposit facility at 2.25%, the main refinancing rate at 2.40%, and the marginal lending facility at 2.65%.

Morgan Stanley said the recent bout of oil-price volatility served as a reminder of the uncertainty surrounding the energy outlook. "This alone should steer the ECB away from leaning strongly in any direction in either the statement or the press conference," economist Jens Eisenschmidt wrote in a research note.

Following June's rate increase, the ECB said the conflict in the Middle East was generating inflationary pressures and that the decision to tighten policy was "robust across a range of scenarios" for how the shock could evolve and affect the euro area's medium-term outlook. Policymakers also warned that the outlook remained uncertain, with upside risks to inflation and downside risks to economic growth.

(Continue Reading – LiveSquawk)

He’s not quite at the level of obscurity of former Federal Reserve Chairman Alan Greenspan, but new Fed chief Kevin Warsh has settled on a few phrases that are notable for their repetition and lack of clarity.

In five public appearances, starting with his nomination hearing in April, through his first press conference, roundtable in Portugal and two congressional testimonies, Warsh has used the phrase “family fight” 13 times, returning to “first principles” 11 times and “inflation is a choice” for the Fed six times.

But what those phrases mean for monetary policy is more challenging than counting their usage. Yet, with a chairman who has decided to say less than his predecessors, there’s a premium on understanding the words he does choose.

(Continue Reading – CNBC)

QatarEnergy is preparing to further extend force majeure on liquefied natural gas shipments through mid-October, according to people with knowledge of the matter, in a move that would prolong the supply shock that has disrupted the global gas market amid war in the Middle East.

Several buyers in Europe and Asia said separately they are expecting a formal notification in the coming weeks. Force majeure is declared when extraordinary situations prevent a company from fulfilling its contractual agreements.

(Continue Reading – Bloomberg)

The U.S. military's Central Command repeated an assertion on Tuesday evening that has been made by the Trump administration many times over the last two weeks, insisting that "despite Iranian aggression, the Strait of Hormuz remains open for commercial vessel traffic."

CENTCOM acknowledged in the same statement that Iran had launched more than 30 attacks on commercial vessels since the war began, which it said had "endangered hundreds of innocent mariners and undermined freedom of navigation."

President Trump, who has himself declared the strait open many times recently, threatened on Wednesday to destroy an Iranian bridge or power plant for every new attack targeting a ship in the vital waterway.

Despite the U.S. president and military continuing to urge vessels to use a southern route through the strait, in defiance of Iran's threats, few shippers seem willing to risk it.

(Continue Reading – CBS)